Posts Tagged ‘borrowing’

Should realtors offer a mortgage inspection?

November 3, 2009

I often wonder how many consumers would benefit from a mortgage inspection which would include a disinterested third-party review of the loan terms, costs and other items which may help the consumer further understand the contractual obligation they are about to enter into. How many homes could be saved, how many homeowners would still own their home.  Think about it, if you were in the market to buy a used car from a private party and you identified the car you were serious about buying 99% of the consumers would have the vehicle inspected by a mechanic and pay a fee to have it looked over.

Were talking about a used car! A purchase that may cost 7-12k. Sure the consumer has the home inspected by a licensed home inspection company. But what about a mortgage inspection, the average consumer does not have the requisite knowledge to determine if the loan is appropriate for their specific needs or the resources to determine if the rate or costs are fair. I personally think it should be mandatory! After all most Realtors want you to use their lender..the reason they want you to use their lender is simple they want total control as much as the process with people they trust most. Who can blame them their paycheck depends upon the loan closing!  However, once the consumer is referred to the lender often times the lender will take advantage of that trust. In some cases charging a higher rate or fee than the consumer deserves. I’m not saying don’t use your realtors lender…I’m suggesting it’s equally prudent to have a check and balance in place and possible pay a flat fee to a dis-interested expert with mortgage experience. Most people fail to realize that a rate that is a .25% higher than necessary will make the lender a significant amount of additional money but cost the buyer/consumer thousands over the life of the loan!

Please provide your feedback!